Google Acquires JotSpot

At first glance, Google’s binge of buying Web 2.0 companies looks a lot like Yahoo’s. But there are some clear differences, which become apparent when you consider the search engine’s purchase of JotSpot. The purchase fits into a puzzle whose picture is becoming very clear.

Let’s start off with a little history. Joe Kraus and Graham Spencer founded JotSpot about three years ago. This was at least the second time around for both of them; during the early days of the first dot.com boom, they were two of the five co-founders of Excite.com. You may remember that Excite merged with AtHome.com in a deal worth $6.7 billion at the time – then suffered the fate of so many Internet companies when the bubble burst in 2001. In October of that year, Excite@Home filed for bankruptcy and sold its high-speed network to AT&T for around $300 million. Excite is still around; it’s now owned by IAC Search & Media, and has long since lost the search engine wars.

But it’s nearly impossible to keep a good entrepreneur down. So Kraus and Spencer started to toss ideas back and forth for a new company. As Kraus tells it, “We realized we’d need a tool to help us organize our thoughts or we’d quickly become overwhelmed. So Graham set up a wiki. I was hooked…Everything was kept in one place, not locked in email threads…we could both make changes to the same document, without having to know HTML…”

That seems to have been Kraus’ “a-ha!” moment. “After twenty minutes of using a wiki, I was convinced that they were like the Internet in 1993 – useful, but trapped in the land of the nerds (which both Graham and I proudly inhabit). So we set out to start JotSpot as a way to bring the power of wikis to a much broader audience.”

The nice thing about having been a part of the first dot.com boom is the connections, and I don’t mean hardware. Kraus and Spencer were able to round up $5.2 million in venture capital from Mayfield Fund and Redpoint Ventures. In three years, the start-up grew to 27 employees and attracted 2,000 companies as clients. JotSpot now boasts 30,000 users who pay up to $200 a month to use its software, and ten times as many people who use the web application for free.

Just in case you haven’t heard of them, wikis are web pages that anyone can write and edit. The most famous is Wikipedia, which, like an online encyclopedia, tries to cover just about everything and is open to nearly anyone to edit (with certain restrictions). There are many other wikis, such as Wookiepedia (which is focused on the Star Wars universe), Wikitravel (for tourists), wikiHow (for do-it-yourselfers and the curious), and so on. Their usage of user-generated content makes them about as Web 2.0 as it gets.

JotSpot’s wiki tools are a little different. It offers a series of online productivity software programs that provide users with many of the same functions found in programs such as Microsoft Word or Excel. That’s right, you can use word processing, spread sheets, to-do lists, and many other applications that are web-enabled. I admit that I’m judging this mostly from JotSpot’s blog; the company has put a hold on new sign-ups for its software until it completes the six-mile move from its own headquarters to Google’s. But the interface looks very intuitive, and when it comes to creating collaborative web pages, users can do a lot more with JotSpot’s applications than they could if they were editing, say, Wikipedia. They can even keep their wikis private, to be shared with only certain very specific people (as the U.S. intelligence community does for its own recently-announced wikis).

It’s worth pointing out that Joe Kraus and Graham Spencer filed a patent application near the beginning of 2006 related to wikis. It’s titled “Collaborative web page authoring” and describes “A method for sending an e-mail message to a web page, comprising: receiving a user-entered e-mail message containing an address associated with a destination web page; identifying the destination web page; extracting at least a portion of the e-mail message; adding content to the destination web page based on the extracted…portion of the e-mail message; and publishing the destination web page containing the added content.” The patent also includes a method of authenticating the information.

The application itself is a very long read, but includes an excellent number and assortment of features. The system described features editable pages; WYSIWYG editing; attachments to pages; revision control; dynamic tables and calendars; the ability to place data from multiple sources onto a page (it looks like you can even use RSS feeds for this); and easily customized and modified pages. In short, it seems to deliver on Kraus and Spencer’s original idea of bringing wikis to everyone.

So why did Google spend an unknown amount of money and/or stock (terms of the deal have not been disclosed) to acquire JotSpot? Google has its own suite of web-based applications designed to boost office productivity: Google Spreadsheet, Google Calendar, Google Docs…the list goes on and on. Most of these have some means of allowing others to easily share and modify what one person has set up, something that has been missing (and keenly desired) for a long time with certain types of applications. For example, have you ever tried to share an Excel spreadsheet?

So at first glance, Google’s purchase of JotSpot seems a bit redundant. Oh sure, by purchasing JotSpot, Google is gaining JotSpot’s clientele (assuming they choose to stay – at least one JotSpot competitor is running a promotion that shows it’s hoping otherwise). And as small as JotSpot’s clientele may be, relatively speaking, I’d be crazy to imply that this didn’t play some role in the negotiations, if only to show that a lot of apparently smart people like the way JotSpot is doing things.

Google is also gaining 27 very bright people. It’s hard to say how much of a role that played in the decision; Silicon Valley seems to attract smart, innovative people like sugar attracts ants. But again, that’s clearly not the biggest reason that Google made this purchase.

Google acquired JotSpot because its own office productivity tools need something more to join them all together into one integrated, easily functioning system. At least one commentator has observed that Google Docs, despite being a good browser-based collaborative word processor, is not quite up to being a platform for bringing together a whole suite of office-style applications. JotSpot, on the other hand, boasts a module-based design; you can use any of them together, mix and match, and even check out its Application Gallery of add-ons.

I want to emphasize here that I’m no expert on how programs work, and that I haven’t even had a chance to use JotSpot’s tools (though I’ve played around with a number of Google’s). But it seems to me Google might be able to use JotSpot as the “skeleton” upon which it can build…well, perhaps whatever it wants. Need an office productivity suite? Here’s JotSpot carrying our best office-style software! Need a website builder? Here’s JotSpot again, with website design modules…and you can choose to add these extra ones over here depending on the type of site you’re planning to build. And of course, all of it is free and ad-supported (though Google might charge a premium if you want the privacy of ad-free versions).

As I mentioned parenthetically above, JotSpot does have competitors. JotSpot is supposed to be aimed more at smaller businesses, while SocialText and others are trying to attract large enterprises. But does that distinction make sense when JotSpot counts companies like eBay and Intel among its clients?

So does Google’s purchase of JotSpot mean companies like MindTouch and CentralDesktop will disappear? Or worse, that smaller companies offering office productivity software suites such as Zoho and ThinkFree don’t have much of a future? Well, the market is still pretty big; then again, so is Google. Is it too early to write about a “Google Effect” that scares and freezes out the rest of the competition?

It’s worth pointing out that Google’s mere entry into other areas certainly didn’t enable the search engine to take over the respective fields. Hotmail, AOL, Yahoo, and many others still have plenty of clients using their email systems. Of course, many people have more than one email address. If there is a large number of people who like to use more than one calendaring system, or more than one spreadsheet, then perhaps these other companies and Google can coexist peacefully.

On a different note, though, there’s the possible lack of privacy issue, and the fact that Google often seems to end up showing ads on most of its services (Gmail is the most obvious example). As I’ve mentioned before in reviewing Google Apps for Your Domain, the implied lack of privacy from the inclusion of ads could prevent the software from being used by businesses in fields where privacy restrictions are strong and government-regulated by instruments such as HIPAA. There will still be a place for applications that can meet a stronger test of privacy than Google can.

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